Motilal Oswal: Grasim Q1 Review - Broad-Based Letdown, Cut Earnings By 35% In FY21
BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Grasim Industries Ltd. reported a very weak Q1 FY21 result due to the double whammy of a weak business cycle and the impact of Covid-19. While volumes have largely recovered this quarter, the margin is expected to remain weak.
Grasim’s standalone operations were impacted by Covid-19-induced lockdown, which dried up domestic demand, particularly for viscose staple fiber and chemicals. Standalone revenue declined 61% YoY to Rs 19.4 billion (our estimate Rs 20.8 billion) due to the impact of Covid-19 on demand.
Revenue fell by 78% YoY to Rs 5.6 billion in VSF and approximately 53% YoY to Rs 7.0 billion in Chemicals.
Reported Ebitda loss stood at Rs 1.45 billion versus profit of Rs 8.43 billion in Q1 FY20. The VSF segment reported Ebitda loss of Rs 1.13 billion, whereas chemicals reported Ebitda of Rs 410 million.
The Fertilizer business reported Ebitda of Rs 720 million, up approximately 40% YoY owing to fixed cost reduction, one-time gains related to freight arrears (Rs 120 million), and better PURAK sales (up 10% QoQ).
Click on the attachment to read the full report:
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.